Shadow Chancellor John McDonnell may have repudiated Marxism – though only, of course, for the duration of the election – but he has not repudiated its soak the rich agenda.
If elected, Labour would raise income tax on those earning above £80,000 a year, although the increases will be “modest”, according to the ex-Marxist, who only a few days ago was happily firing up a left-wing mob with the hammer and sickle as his backdrop (a bit like Arsene Wenger, he didn’t see it fluttering in the breeze).
There are roughly 1.5 million people earning £80,000 a year, including plenty of middle class professionals such as senior doctors, head-teachers and civil servants – though not Mr McDonnell who gets by on £76,011. For this measure to mean anything to a State currently spending around £750 billion a year and a Labour party with extravagant plans for further increases, it would have to seek to raise at least £10 billion, which would mean an average tax increase of nearly £7,000 per head – a hefty sum. I say ‘seek to raise’ because there is plenty of evidence that punitive taxes on the rich are counter–productive. Push the levies too high and you just create work for tax accountants.
Tax increases of this sort would further narrow the tax base – another unhealthy development. Not many people know this, but last year the Institute for Fiscal Studies revealed that approaching half of the working age population of the UK (23 million people) pay no income tax at all.
Meanwhile, the richest one per cent, 300,000 people, pay 28 per cent of all income tax. This figure is up from 11 per cent in 1979, reflecting the way that the tax burden is increasingly concentrated on a small elite. The top five per cent of earners pay almost half of all income tax. McDonnell must be praying that they don’t start emigrating on day one of a Labour government.
But there is not going to be a Labour government. And McDonnell’s fantasy economics are not about securing a Labour government. They are about hanging on to power – power over the Labour party. Jeremy Corbyn and his henchmen are bidding to create a survival strategy for the leader when Armageddon comes on June 8.
Rather than concentrating their efforts on the conventional objective of winning parliamentary seats, the Corbynistas are seeking to push up their share of the vote (effectively piling up votes in safe Labour seats) in preparation for arguing that Corbyn deserves to stay on because he has done better than his predecessor, Ed Miliband.
McDonnell’s announcement (coupled with a promise that 95 per cent of people will face no tax increases) is a naked pitch to Labour’s (admittedly dwindling) core vote. As one campaign official told The Sunday Times, “Their entire focus is motivating Labour voters in safe seats. They have no interest in targeting winnable seats. They think if they can match Ed M they can prevent Jeremy having to resign regardless of how many seats we lose.”
So here is Labour’s roll call of losers: Michael Foot 1983 27.6 per cent of the national vote; Gordon Brown 2010 29 per cent; Ed Miliband 2015 30.4 per cent; Neil Kinnock 1987 30.8 per cent. According to polling experts Michael Thrasher and Colin Rallings, the local elections translated into a national vote share of 28 per cent for Labour – putting Corbyn firmly in the relegation zone even on his crazy calculations.
Labour (and Corbyn specifically) remain the story in this campaign. Can he really poll lower than any Labour leader since the War? Will he get even fewer seats than the meagre 209 clocked up by Foot? After he does – as looks eminently likely – will he declare victory and insist he be allowed to carry on taking his message to a grateful nation?
(Image: Funk Dooby)